Penguin demonstrates how to use “agency pricing” to kill sales of a book’s digital version

[Screen shot: Note the price of the digital version of the book (the “Kindle edition”) is over $9 higher than the hardcover version of the book; a pricing decision dictated by the publisher and not Amazon, usingthe so-called “agency model” pricing model.]

While I don’t know if I’m quite ready to officially declare myself a conspiracy theorist who suggests book publishers are colluding (or, perhaps merely “signaling” one-another) by using the “agency pricing” model to, in effect, “restructure the eBook pricing model” and return the world to a place where publishers had the ability to dictate to Amazon what it must charge customers for a book, when I run across a book pricing strategy demonstrated on the screen shot above, it seems to me rather self-evident that the publisher is using the agency model to undermine eBook sales.

Before visiting the page, I assumed that, if available in a Kindle format (I am a fan of the Kindle iPhone and iPad apps), it would be the type of book I’d purchase as an eBook but never purchase on paper, either hardcover or or paperback. First off, I’d only read a book like this while traveling and there is no way I’m carrying around a 1,200-page book. And second, while I’m interested in history, I’m not always a fan of the writing styles of specific historians. The low $9.99 price-point of Kindle eBooks has led me to purchase many books in a “try before you buy the hardcover edition” fashion — so I’m willing to make more impulse purchases of books to “audition” authors if the topic fascinates me. Indeed, as I’ve written before on this blog, there are certain books like Jon Mecham’s American Lion: Andrew Jackson in the White House, that I’ve purchased in three formats. (And in the case of Mecham’s book that later went on to win a Pulitzer Prize after that post, I’ve purchased multiple hardcover copies as gifts for history-buff friends, as well.)

So I was dismayed and disappointed when I discovered its publisher (Viking, a part of Penguin Group) has used the potentially unlawful agency model of eBook pricing to force Amazon to sell the Kindle version of the book for $9 more than what it charges for the hardback version.

Their motives seem transparent: 1. Kill ebook sales of the book. 2. Make it look like Jesus would think that’s okay.

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No.2 was brilliant. haha!Publishers who desperately mark prices up will be schooled by publishers who 'get' ebook impulse buying. Eg. Disney whose $2 books were taking over the charts on iBooks last week…

Then again, the desperate publishers could always petition the FTC to save their business model along with the newspapers…

Aaron, I was better off just out-sourcing to you everything related to digital books instead of trying to figure this out. But I'm totally flummoxed by the pricing on this book. I can't figure out who it benefits. My best guess: This is a book that's going to be “assigned” to theology students and there's a desire to keep digital versions outside that niche of well-known content pirates.

SplinteredMind

No.2 was brilliant. haha!Publishers who desperately mark prices up will be schooled by publishers who 'get' ebook impulse buying. Eg. Disney whose $2 books were taking over the charts on iBooks last week…

Then again, the desperate publishers could always petition the FTC to save their business model along with the newspapers…

Aaron, I was better off just out-sourcing to you everything related to digital books instead of trying to figure this out. But I'm totally flummoxed by the pricing on this book. I can't figure out who it benefits. My best guess: This is a book that's going to be “assigned” to theology students and there's a desire to keep digital versions outside that niche of well-known content pirates.

“Jobs takes the stage to discuss a major issue and the reporters there are clapping, very minor observation, but that says a lot. No CEO is looking for adulation from the press in a crisis, but Jobs seems to expect it and they give it to him.”

I disagree that Jobs expects adulation; sure he’s arrogant, but what CEO of a huge, successful, influential company isn’t arrogant? And don’t we want him to be? If Jobs got up there all namby-pamby and waffled on what he was trying to say, Apple would be laughed right out of the stock market. Of course you want a CEO that believes his products are better than everyone else’s. And most of the time, Apple’s are.

As for the reporters clapping, that could be out of politeness for someone taking the stage, but more than likely it’s due to the Cult of Apple. Even before Apple was making iPods and iPhones the company had a legendary, mythological quality to it that to this day results in its consumers forming emotional attachments to their products. Or so I hear. 😉

Anonymous

Well Jobs would never flounder and he was in my view quite namby pamby: slinging mud at others when the issue is a problem with your product is generally NOT OK. It’s OK for consumers to have an emotional attachment to a company’s product but not reporters for it clouds their objectivity and that’s part of the problem.

The late great Roy Disney said it best, to paraphrase: branding is something you do to milk cows because there’s ultimately no real difference. Our brand has a life of its own and stands for something and is different from everyone else because of the people behind it. Apple’s brand is that emotional attachment, their products are different and they hold themselves up to higher standards and that’s what people have fallen in love with.

Responsibility for and transparency is something its consumer is entitled to without delay in every instance of “failure” without need for a groundswell of protest, so-what missives or sundry other arrogant displays from the company. And that’s how the media should portray these displays of indifference each and every time they occur.

He was transparent—or at least as transparent as we’re going to get. And if you don’t want to believe what he was saying that’s fine, but no one—objective reporter or not—is going to win an argument by saying “he’s lying!”

Anonymous

That’s so very true, but of course you don’t say he’s lying, no more than Woodward and Bernstein said Nixon was lying. Hopefully we’ll see someone follow-up on when he knew about the issue and whether he decided to move ahead despite best counsel from others which leads to is he still the right person if he dismisses good advice, ignoring advice that impacts the bottom line, his focus and perhaps his health is a preoccupation. All roads you don’t want the press to travel down. Transparency doesn’t take weeks.In the end it’s about how tarnished is the halo going forward and will there be a different standard or higher level of scrutiny as a result of this poorly handled issue. If they had mobilized early in the beginning this truly would have been a non-issue. It’s hard to find malicious intent when you come clean early.

Launched in August, 2000, RexBlog.com is the personal blog of Rex Hammock, founder/ceo of Hammock Inc., a customer media and marketing services company founded in 1991 in Nashville. Rex is also founder/helper-in-chief of SmallBusiness.com.